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Each year the Administration issues a proposed budget to Congress which outlines policy objectives, funding allocation, and concurrent tax changes from the coming fiscal year. In late March, President Biden issued the Budget of the United States Government – Fiscal Year 2023. The specific details are included in a separate document, General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals, also known as the “Green Book”.

Forgiveness can be challenging for many individuals, but it turns out the Small Business Administration (SBA) is also having a difficult time with it too. It has been reported by many lenders there have been challenges encountered managing the hundreds of Paycheck Protection Program (PPP) loan forgiveness applications received resulting in delays. Concurrently, borrowers have also been challenged by trying to work through an overly burdened forgiveness process. To address these issues, the SBA recently issued a new Interim Final Rule (IFR) which makes several changes designed to simplify and speed up the process.

Since the American Rescue Plan Act of 2021 was signed into law last month by President Biden, there has been a flurry of changes coming out of Washington. This includes an extension to the Paycheck Protection Program application deadline, IRS extension of the individual tax filing deadline, an increase in EIDL maximums, and the introduction of the new American Jobs Plan.  All of this just months after the Consolidated Appropriations Act, 2021, (CAA) was passed at the end of December.

In recent weeks, the Biden Administration has focused on expanding COVID-19 relief opportunities for small businesses through the Paycheck Protection Program (PPP). It was announced on February 22nd the Small Business Administration (SBA) would be initiating several changes including an exclusive 2-week application period for small businesses and a new loan calculation formula. On March 3rd, the SBA issued Interim Final Rule (IFR), Paycheck Protection Program Revisions to Loan Amount Calculation & Eligibility, that modifies the formula for determining the maximum loan amount using gross income rather than net profit.

Congress has been busy over the last few weeks working to agree on new legislation to extend COVID-19 relief to businesses and individuals. There are two competing pieces of legislation which include the HEROES Act passed by the House and the HEALS Act passed by the Senate.

Are tax-free reorganizations possible? Absolutely. Internal Revenue Code Section 368(a)(1) allows for tax-free (or tax-deferred) reorganizations for certain acquisitions, divestitures, bankruptcies, and corporate restructurings. F-type reorganizations, which are a type of corporate restructuring permitted under subparagraph F, allow a single corporation to change their “identity, form, or place of organization” without incurring a tax bill. But F-type reorganizations can do so much more than that.

The Tax Cuts and Jobs Act of 2017 was touted as one of the most significant changes to the tax code in over thirty years. There was a sharp reduction in the federal income tax rate for businesses, a near doubling of the standard deduction for individual taxpayers and several important changes that impact estate and gift tax planning efforts. While the media focused on the broader changes that affect almost every taxpayer, there were other changes essential changes that impact estate and gift tax planning strategies.